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After strikes, Amplats to ax many remaining workers

A South African mining company has announced that it will cut 14,000 jobs. Restructuring by Amplats could trigger labor unrest rivaling last fall's protests (pictured) in the world's leading platinum-producing nation.

Anglo American Platinum, which owns 80 percent of the producer, plans to shut two mines and sell another in addition to the cuts. Government officials expressed deep dismay, and a labor leader has threatened strikes across Amplats operations in South Africa.

Most of the cuts will fall in Rustenburg, the country's platinum belt about 120 km (70 miles) northwest of Johannesburg.

"If they put any shaft on care and maintenance, all of the operations will go on strike," said Evans Ramogka, a labor leader in Rustenburg. "Nothing like this will be allowed."

The 2012 strikes in Rustenburg led to the deaths of 50 people, 34 of them shot dead by police.

In 2006, Amplats made a quarter of Anglo's profit; that has dwindled with rising costs and weak prices. Investors welcomed the plan to cut output 20 percent - about 400,000 ounces (11,000 kilograms) annually - and shift to profitable production as the first step in Anglo's own recovery.

Analysts caution that the reduction comes from planned production goals, which Amplats has not achieved in years. The number may prove closer to 300,000 ounces, a little above market expectations.

Platinum rose 2 percent on the news, passing gold for the first time since March. Anglo shares, however, fell 4 percent after the government expressed concern.

Mines Minister Susan Shabangu said Amplats had "betrayed the trust" of the government.

"There was never a consultation," Shabangu said. "They've come up with their own plan, finalized their plan and told us."

Weak prospects

Amplats promised to try to replace jobs through supporting housing and small-business initiatives. Shabangu dismissed efforts - which will cost Anglo 470 million rand ($53 million/42 million euros) out of a total restructuring cost of 3.8 billion rand - as a "public relations exercise."

Shabangu also called the plan to mothball mines tantamount to a "complex form of hoarding of minerals [to] deprive the country of economic growth and workers of their livelihoods."

There are also ongoing strikes in the Western Cape province, where farm workers have fighting for higher wages, affecting vineyards and fruit production. There are pitched battles between seasonal laborers, who make just $7.50 a day and are demanding the sum be doubled. Health officials and witnesses said a farm worker shot on Monday by police firing rubber bullets died of his injuries in the hospital.